FXStreet (Delhi) – Rob Carnell, Chief International Economist at ING, notes that the US CPI for December fell 0.1% MoM vs a consensus 0.0% MoM expectation while the energy prices were down 2.4% MoM, and food prices also fell for a second consecutive month. Key Quotes “But it is the weakness in the service sector inflation component that probably caught the consensus out the most. At only +0.1% MoM, this was down on the trend 0.2-0.3% MoM growth in service sector prices over recent months, and was weighed on by a slightly weaker growth profile in residential rents, though it has to be said that the weakness in services was not confined to rentals, and was reflected also in areas such as recreation and education. Goods (commodities prices) were as ever, very weak (-0.1% MoM ex food and energy, -2.1% YoY). At this stage, with the market looking for no further Fed rate hikes until 2H16, and only one rate hike in total this year, it is our own forecasts with two further rate hikes, one in June, and another in 4Q16, that look more in need of amendment than the market view. The Fed dot diagram suggestion for four further hikes this year looks utterly out of touch with reality, if anyone was still paying any attention to this.” For more information, read our latest forex news.